Daily Market Outlook, June 5, 2020 

<h2><span>Daily Market Outlook, June 5, 2020 </span></h2>
<p><span><strong>Risk sentiment remained mixed during the Asia trading session ahead of today’s key US labour market figures</strong>. Brent crude oil edged above $40pbl as OPEC+, including Saudi Arabia and Russia, may reportedly meet as soon as this weekend to finalise an agreement to extend production cuts. On the data front, Japanese household spending fell steeply by 11.1%y/y in April, while UK GfK consumer confidence declined to -36 in May compared with -34 earlier in the month. German factory orders, meanwhile, plummeted more than forecast by 25.8%m/m in April. </span></p>
<p><span><strong>This afternoon’s monthly US labour market report due at 1.30pm will be the focus for today</strong>. Last month’s April figures showed nonfarm payrolls plunging by 20.5 million and the unemployment rate jumping up to 14.7%. A further deterioration in the labour market is expected in May, but less severely than in April. Look for nonfarm payrolls to have fallen by 10 million, while the consensus median prediction is for a 7.5 million decline. Anticipate the unemployment rate to rise again to 20% (consensus: 19.1%), which would be the highest level since the Great Depression. The risk to this payrolls forecast is probably skewed to a smaller decline after the ADP on Wednesday reported a fall in private payrolls of ‘just’ 2.8 million in May, much less than anticipated. Nevertheless, while the ADP mirrored the official figures in April, it remains to be seen whether it will do so again in May. In particular, the weekly initial jobless claims data point to a large increase in newly unemployed (although less than in April) while survey evidence points to weak hiring. Overall, broader evidence suggests payrolls may have fallen more than the ADP report suggests. </span></p>
<p><span><strong>In the UK, markets will likely be on the lookout for Brexit headlines as the latest round of UK-EU negotiations enters the final day</strong>. Reports suggest both sides have reached an impasse. With the UK insisting it will not extend the transition period beyond the end of the year, the time to reach an agreement is short. There is pressure to inject momentum in the talks as PM Boris Johnson and European Commission President Ursula von der Leyen are expected to meet later this month. </span></p>
<p><span><strong>The EURUSD rallied above $1.13 to mid-March highs yesterday after the ECB announced a €600bn increase to its Pandemic Emergency Purchase Programme (PEPP)</strong>, also dragging the pound higher against the greenback. Risk sentiment has stabilised ahead of today’s US labour market data, which has resulted in a modest recovery in the USD. Stronger risk appetite over the week, nevertheless, has supported US 10-year bond yields which have risen above 0.8%.</span></p>
<h3><b>Today’s Options Expiries</b><span> for 10AM New York Cut (notable size in bold)</span></h3>
<ul>
<li><span>EURUSD: 1.1230-25 (1.4BLN), 1.1230-35 (1.4BLN) 1.1250 (900M), 1.1300 (600M)</span></li>
<li><span>GBPUSD: 1.2445 (320M)</span></li>
<li><span>USDJPY: 108.80 (1BLN), 109.00 (200M), 109.25 (200M)</span></li>
<li><span>AUDUSD: 0.6975 (300M)</span></li>
<li><strong>Option dealers report a size buyer 18 August expiry 1.1750 EUR call Contract paid EUR 1.1-billion 17.05 implied volatility In premium terms – that’s 0.29% EUR or 33 USD pips option would benefit from more EUR gains and higher implied volatility</strong></li>
</ul>
<h3><span>Technical &amp; Trade Views</span></h3>
<p><b>EURUSD Bias: Bullish above 1.13 targeting 1.1420</b></p>
<p><span>From a technical and trading perspective, as 1.10 now acts a s support bulls will target a test of the equality objective at 1.1235, which also represents the monthly R1 and weekly R1, from here expect profit taking for another test of 1.10 UPDATE target achieved intraday as 1.1180 supports potential for another squeeze higher to test offers and stops above 1.13 the 78.6% retracement of the pandemic decline UPDATE as 1.13 now acts as support bulls target a test of 1.1420 next</span></p>
<p><img class="aligncenter size-full wp-image-44796" src="http://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-05-08.29.48.png" alt="" width="2152" height="1205" srcset="https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-05-08.29.48.png 2152w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-05-08.29.48-300×168.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-05-08.29.48-1024×573.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-05-08.29.48-768×430.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-05-08.29.48-1536×860.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-05-08.29.48-2048×1147.png 2048w" sizes="(max-width: 2152px) 100vw, 2152px" /></p>
<p><b>GBPUSD Bias: Bullish above 1.2475 targeting 1.2650</b></p>
<p><span>GBPUSD From a technical and trading perspective, price tested and overcale symmetry swing resistance sighted at 1.2475. As price continues to trade above 1.2475, look for a test of cycle highs at 1.2650 before a potential correction could develop to test bids back to 1.2350 UPDATE target achieved, as 1.2570 supports bulls eye 1.27 stops next</span></p>
<p><img class="aligncenter size-full wp-image-44797" src="http://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-05-08.31.54.png" alt="" width="2149" height="1202" srcset="https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-05-08.31.54.png 2149w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-05-08.31.54-300×168.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-05-08.31.54-1024×573.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-05-08.31.54-768×430.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-05-08.31.54-1536×859.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-05-08.31.54-2048×1146.png 2048w" sizes="(max-width: 2149px) 100vw, 2149px" /></p>
<p><b>USDJPY Bias: Bullish above 1.09 targeting 1.1070</b></p>
<p><span>USDJPY From a technical and trading perspective, the topside breach of 108.50 delays downside objectives opening a retest of range resistance above 109, however as supply above 1.09 stems the upside look for a retest of buds back to 1.08 UPDATE the upside breach of 1.09 suggests range expansion with 110.70 the upside object as 1.09 supports</span></p>
<p><img class="aligncenter size-full wp-image-44799" src="http://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-05-08.34.04.png" alt="" width="2149" height="1152" srcset="https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-05-08.34.04.png 2149w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-05-08.34.04-300×161.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-05-08.34.04-1024×549.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-05-08.34.04-768×412.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-05-08.34.04-1536×823.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-05-08.34.04-2048×1098.png 2048w" sizes="(max-width: 2149px) 100vw, 2149px" /></p>
<p><b>AUDUSD Bias: Bullish above .6900 targeting .7000)</b></p>
<p><span>AUDUSD From a technical and trading perspective,sustained price action above .6800 witnessed the grind higher persist opening a test of the psychological bit figure at .7000. From this initial foray above .7000 anticipate profit taking pullback to .6800 UPDATE target achieved as .6950 supports look for test of stops to .7050</span></p>
<p><img class="aligncenter size-full wp-image-44800" src="http://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-05-08.40.40.png" alt="" width="2143" height="1150" srcset="https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-05-08.40.40.png 2143w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-05-08.40.40-300×161.png 300w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-05-08.40.40-1024×550.png 1024w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-05-08.40.40-768×412.png 768w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-05-08.40.40-1536×824.png 1536w, https://blog.tickmill.com/wp-content/uploads/2020/06/Screenshot-2020-06-05-08.40.40-2048×1099.png 2048w" sizes="(max-width: 2143px) 100vw, 2143px" /></p>
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<p><i><span>Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.</span></i></p>
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